Professor Patrick Honohan:

I agree with that and I will try to explain why that might have happened. Much of the drive of the McDowell report was about consumer protection. More resources were given to the consumer protection side of financial regulation because that was where the push was and where people were interested in doing new work. The idea was to constrain the banks following the bad practices identified in previous inquiries in the 1990s. Consumer protection is very important and I think the bank was right to devote the attention to that area, but I do not think it should have neglected the prudential side as much as it did. It is part and parcel of this approach. If all the Central Bank wanted to check was whether there was a good governance committee and good approvals then it could do so with a lighter staff. Anyway, I fully agree with the premise.